Japan GDP growth dips to 1.1% in Q2

Japan's economy experienced a slowdown in GDP growth in the second quarter of 2026, increasing by 1.1% year-over-year, short of the 2% forecast. This deceleration was driven by weak domestic demand, as consumption of non-durable goods and services declined, and business investment contracted. Additionally, public inventories fell due to government measures to address the crisis in the Middle East. Although exports helped support growth and performed better than expected, the weakness of the yen also contributed to improved export performance. Following the release of the data, the Nikkei 225 index rose slightly, and the yen appreciated against the dollar, while the Bank of Japan raised its forecast for the country's economic growth in 2026 to 0.6%.

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